Talk of a Comcast-Wireless Deal Heats Up

By Dana Cimilluca

Comcast CEO Brian Roberts threw cold water on rumors of a big, imminent wireless investment by the cable company. That may not be enough to douse them altogether.

Speculation that Comcast — on its own or with other cable companies like Time Warner — will try to buy a national wireless carrier like Sprint Nextel or T-Mobile USA, or build up a new competitor on its own have been around for a long time. (For a cable company, ownership of a wireless network would help it provide a fuller set of offerings and compete better with AT&T and Verizon, the thinking goes.)

The rumors have heated up lately, as Roberts acknowledged on the conference call for the company’s third-quarter earnings today — a disappointing report that sent its shares down 12% to $20.88. Roberts noted there are new wireless-spectrum auctions approaching and that often prompts companies to reassess their strategic positions. We also would note that Sprint stock in particular, having been battered by operational woes that led to the ouster of its CEO this month, is in a depressed state that could lure a bargain hunter.

The second question on the the call was from Sanford Bernstein analyst Craig Moffett, who asked Roberts about Comcast’s wireless strategy, and by implication, the possibility of a big investment or acquisition. Roberts, known for bold M&A gambits like AT&T Broadband and Disney (the latter failed), responded “It is something we are constantly assessing.” He took pains, however, to say “there is no new news today.”

Compare that to what Comcast’s then-co-Chief Financial Officer John Alchin said around this time a year ago on the subject of a Sprint Nextel acquisiton: “There is nothing out there. There is nothing in the pipeline. Nothing contemplated.”

Either way, it is something investors are thinking about. Moffett told us that investors don’t see any advantage to Comcast getting into the wireless business and the fact that Roberts didn’t rule out such a deal is weighing on the shares today. “At best it would be the fifth entrant into the market,” he said.

Comments (5 of 12)

If Nextel was going down quickly, why did Foresee buy it? Nextel was the most profitable wireless company, had the highest ARPU and lowest churn in the industry, not to mention the extremely loyal customers. Until the OP gang stops acting like an RBOC and starts acting like a wireless company, the slide into the abyss will continue.

3:58 pm November 1, 2007

Current Employee and Share Holder wrote :

You all need to get your head out of your ass and get over the East vs West thing as well as How Nextel is being treated. Nextel was going down quickly, Sprint tried to save it. Instead its been a drain on Sprint and will until people stop saying saying that the centergy cant be done, and do it. Besides all of that, most importantly, who freakin cares about all the coolness of what a wireless carrier (Sprint) can provide if you cant make or recieve a freakin phone call! I'm in KC, and I routinely have dropped calls or family members who say they never got one, yet I get their VM etc. Fix the basics, duh. And so mouch depends on the handsets, but yet Sprint troutinely is behind the trend curve and handsets with issues that are never corrected. Sprint routinely gets scooped with Handsets and when Sprint does have a exclusive its hardly ever seen as a "hip" or a trend setting device. With all of that there is so much more of what Sprint is, and other products it provides yet its "all about wireless". BLah

11:02 am November 1, 2007

xnext wrote :

Liquidate the company. As has been proven, you're never going to combine the two divergent cultures. Idiots in Reston? How about the OP campus? They're the drain on the company. Moreover, it was not a merger, it was an acquisition, and legacy Sprint was the victor. If blame is to go around, target OP. Moreover, nobody wants to mover there. It's a one-horse town, and the with the company's RIF history, who'd want to be stuck there? Reston should be the total HQ; it's a high tech hub, with close proximity to the FCC.

10:40 am November 1, 2007

zulu2 wrote :

Sprint's biggest problem is the idiots in Reston it inherited. Shut that mess down and the stock will be in the 20s quickly.

1:59 pm October 30, 2007

Gumby wrote :

The notion of combing Internet, TV, phone, wireless, etc into one single bill is a joke!! Nobody can watch 500 TV channels at the same time!! We can return to over the air antennas since we have HDTV over the air now. It is free out there for all channels to go over the air and stop charging us . They can earn their livings from advertisers themselves. We can have Internet over the air for free, too. Digital signals can not be disturbed as much as analog signals of yesteryears. We dont need cable anymore. Cable was for old analog signals that needs to be shielded in a thick cable. Hoo boy!

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